Why Avis’ $500 Million Zipcar Buy Is Good News for Car-Sharing Startups

That might worry many of the startups also vying for users seeking cars on demand, but not exactly, says Jessica Scorpio, co-founder of Getaround.

There is a slight difference between Getaround and Zipcar: Instead of controlling the fleet of cars, Getaround gives car owners a way to rent their cars to Getaround users for an hourly rate. The renters get paid for doing so.

The idea is to use existing assets — cars that are already on the road — instead of deploying additional cars on what are already crowded streets and parking lots.

Today’s big price tag for Zipcar only serves as a reminder of the upside that car-sharing services have, Scorpio said. Getaround’s fleet also rose to the level of Zipcar’s in a shorter period of time, she said.

We caught up with Scorpio to find out more about Getaround. Here is an edited transcript of the interview:

WSJ: Why is this a good thing for car-sharing startups?

Jessica Scorpio: I think it’s great for the whole space, the whole transportation industry. It really shows that car-sharing is a good idea that works. To see the traditional rental companies getting into it is really a good validation. I think what this does is really bring car-sharing into the main stream.

WSJ: How big is Getaround compared to Zipcar?

JS: We signed up 10,000 car owners in a year and a half, and it took Zipcar 12 years. The Airbnb-type startups, using all these excess assets, have a lot more potential to have a better kind of ecosystem around them. We’re using existing surplus, and we have a whole community supporting each other.

WSJ: Does this change your funding outlook?

JS: Not really, we just raised $13.9 million and last year we expanded to five markets. We’ll be expanding to more cities this year. We have ongoing conversations with various car companies. Nothing to share at this point. Car rental companies are seeing more demand for access to cars rather than owning it. More options allow more people to know about Getaround.

WSJ: Does it have anything to do with using mobile devices?

JS: I think mobile’s huge. You’re going to see a lot more from us in the coming months. What Zipcar did a good job of was using mobile to let people access the car, kind of like how Uber has a great mobile experience. You hit a button and the car unlocks. We’re aiming for the same thing with Getaround. We have a proprietary hardware device. Really, these services are getting to a point where your phone is your mobility device.